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San Antonio Business and Economics Society
MexicoMexicoBordering on Success?Bordering on Success?
Jorge G. GonzalezTrinity University
Six years ago ...
Catastrophic Devaluation of the PesoSignificant Capital OutflowsSkyrocketing InflationCollapse of the Domestic EconomyUnprecedented Political Crisis
Ad Augusta per Angusta
Monetary and Fiscal DisciplineBanking Crisis: Foreign InvestmentAvoid ScandalsDemocratic Change
Results
Solid Growth Record
Real GDP% Change
4.42
-6.17
5.156.77
5.033.75
6.86
-8-6-4-202468
1994 1995 1996 1997 1998 1999 2000
Source: Banco de México www.banxico.org.mx
Results
Solid Growth RecordDecline in Inflation Rate
Inflation Rate
7.05
51.97
27.7
15.72 18.6112.32
8.96
0
10
20
30
40
50
60
1994 1995 1996 1997 1998 1999 2000
Source: Banco de México www.banxico.org.mx
Results
Solid Growth RecordDecline in Inflation RateDecline in Interest Rates
Interest Rates28-day CETES
0
20
40
60
80
Source: Banco de México www.banxico.org.mx
Results
Rapid Economic GrowthDecline in Inflation RateDecline in Interest RatesIncrease in Employment
Employment(Thousands of IMSS Members)
10000110001200013000140001500016000
Ja
n-9
4
Ja
n-9
5
Ja
n-9
6
Ja
n-9
7
Ja
n-9
8
Ja
n-9
9
Ja
n-0
0
Ja
n-0
1
Source: INEGI www.inegi.gob.mx
Results
Rapid Economic GrowthDecline in Inflation RateDecline in Interest RatesIncrease in EmploymentStrong Peso
Exchange RatePesos per U.S. Dollar
456789
1011
Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01
Source: Banco de México www.banxico.org.mx
Results
Rapid Economic GrowthDecline in Inflation RateDecline in Interest RatesIncrease in EmploymentStrong PesoStrong International Sector
International TradeBillions of Dollars
94
- I
95
- I
96
- I
97
- I
98
- I
99
- I
00
- I
10
20
30
40
50
Exports
Imports
Source: Banco de México www.banxico.org.mx
Zedillo’s Legacy
Rapid Economic GrowthDecline in Inflation RateDecline in Interest RatesIncrease in EmploymentStrong PesoStrong International SectorDemocratic Change
Bordering on Success?
Weak U.S. economyOvervalued Peso
Inflation Differential vs. Exchange Rate
1995 19971999
2001
0
100
200
300
400
Source: Banco de México www.banxico.org.mx
Exchange Rate
Inflation
201.5
287.0
Foreign Direct InvestmentBillions of Dollars
2.64.8 4.4 4.4
11.09.5 9.2
12.811.611.9
13.2
0.0
5.0
10.0
15.019
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Source: Banco de México www.banxico.org.mx
Bordering on Success?
Weak U.S. economyOvervalued PesoFiscal Reform
Bordering on Success?
Weak U.S. economyOvervalued PesoFiscal ReformFox and Congress
Bordering on Success?
Weak U.S. economyOvervalued PesoFiscal ReformFox and CongressCrisis Abroad
Bordering on Success?
Weak U.S. economyOvervalued PesoFiscal ReformFox and CongressCrisis AbroadWar on Poverty
San Antonio Business and Economics Society
MexicoMexicoBordering on Success?Bordering on Success?
Jorge G. GonzalezTrinity University
San Antonio Business and Economics Society
MexicoMexicoBordering on Success?Bordering on Success?
Jorge G. GonzalezTrinity University
www.trinity.edu/jgonzal1
